Wall Street Equity Tracks European Equity Prior to Fed Meeting

Wall Street stocks lag behind European peers ahead of the two-day US Central Bank meeting, which closely monitors clues about the future path of monetary policy.

Wall Street’s S & P 500 index fell 0.2% at lunchtime in New York, dropping from its all-time high on Friday’s benchmark hit. Meanwhile, the technology-focused Nasdaq Composite index rose 0.4%.

Core US Treasury debt was sold on Monday, and benchmark 10-year Treasury yields rose 0.03 points to 1.5%.This continued Rally Last week, investors funded the Federal Reserve, which is looking past high inflation in the United States, to maintain pandemic support for financial markets.

The Federal Reserve Board is widely expected to maintain $ 120 billion in bond purchases each month when it meets Tuesday and Wednesday. Following the purchase of these assets, interest rates were set in Europe and the United Kingdom, lowering government bond yields, reducing corporate borrowing costs and increasing the attractiveness of high-risk assets such as equities.

But after a rapid recovery U.S. economy Some analysts have seen Fed policy makers present their first forecast of rising interest rates after the pandemic, backed by the Corona virus vaccine and President Joe Biden’s massive stimulus package. ..

“We hope the Fed will improve its growth outlook and significantly revise its inflation forecast,” Tiffany Wilding, a US economist at bond investment firm Pimco, said in a research note. “I think the majority of Fed officials are also ahead of the forecast for the first rate hike by 2023. [from 2024].. ”

Headline US consumer price index hit 5 percent In 12 months until May. Federal Reserve Board Chair Jay Powell argues that the rise is a temporary effect of the resumption of the US economy after the coronavirus cessation. “But others are concerned that inflation is more structural,” said Marco Pirondini, head of US equities in Amundi. “I think both sides are 50-50.”

According to the Bureau of Labor Statistics, rising used car and truck prices after a global semiconductor shortage reduced new car production accounted for about one-third of the May CPI rise.

After Biden, Mr. Pirondini said US wages could also “rise in a more sustainable way.” signature A presidential order to raise government wages was issued in late April, putting pressure on private companies to raise salaries.

Across the Atlantic, the Pan-Regional Stocks Europe 600 hit a record high of 0.2% in the sector where energy performs best, following further rises in oil prices.

Brent crude rose 1.3% on Monday to $ 73.64 a barrel, the highest international oil benchmark in two years.

Line chart of rebased index showing that UK travel and leisure stocks are tracking a wider market

Elsewhere in the region, British travel and leisure companies were lagging behind the wider market. About the report The planned release of the Covid-19 curb in the UK on June 21 will be postponed by the British government.

The news reduced the FTSE 350 Travel & Leisure sector by 1.4%, while the broader FTSE 350 Index rose 0.2%.

The dollar index, which measures the US dollar index against other companies in the same industry, fell 0.1%. The euro rose 0.2% against the greenback and bought $ 1.212. Sterling rose 0.1% to $ 1.411.

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Wall Street Equity Tracks European Equity Prior to Fed Meeting

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